Oct. 8 (Bloomberg) -- Halfords Group Plc, the U.K.’s biggest retailer of car parts and bicycles, soared to its highest in more than two years in London trading after saying first-half profit would rise, boosted by its car maintenance and cycle units.

Halfords rose 7 percent to 390 pence, the most expensive price for the stock since September 2007, and the largest one-day gain since February this year, valuing the company at 820 million pounds ($1.3 billion).

Redditch, England-based Halfords said it was “confident” of achieving a pretax profit in the range of 59 million pounds to 61 million pounds compared with 49.1 million pounds a year earlier, according to a statement distributed today by the Regulatory News Service.

Halfords’ shares have risen more than 50 percent in a year, helped by consumer demand for bicycles. Its car maintenance unit “continues to trade strongly” and the company has seen increased purchases of camping equipment as more consumers holiday in the U.K.

“Cycling is a good-news market,” David Wild, Halford’s chief executive officer, said today in a telephone interview. “It’s in tune with health, sustainability, and the economy. We’re helping the move towards more cycling in the U.K.”

Sales at stores open more than a year rose 2.2 percent in the second quarter, and the company’s margins have increased more than forecast for the full year, Wild said today.

Tax, Margins

The company is “cautious” about the second half of the fiscal year because of higher value-added tax rates, increasing commodity prices, and a higher U.S. dollar, said Wild. Halfords will focus this winter on its car maintenance and Christmas bicycle sales as camping gear demand drops.

“We’re still confident we can move to the next level with some profit growth in the second half and sustainable growth in our earnings in the long-term,” Wild said. Halfords expects to report full-year profit margins “slightly” above its 100 basis-point forecast, he said.

To contact the reporter on this story: Clementine Fletcher in London cfletcher5@bloomberg.net.

Last Updated: October 8, 2009 11:47 EDT